Will the World’s Biggest Emitters Finally Play Nice at COP28?

“All of the above” is a phrase that often pops up in climate-related discussions. Why? It’s a begrudging realization that it’s no longer simply enough for the world to try to curtail emissions—climate change is already here, after all, and there are enough reminders of it every day. And so climate negotiators are increasingly open to discussing multiple priorities at once: cleaner energy but also capturing carbon and methane that’s already in the environment, all while mitigating the impacts of the weather fluctuations roiling our planet.

All of the above ideas will be on the table when 167 world leaders and their entourages meet in Dubai later this week for the U.N.’s annual climate summit, COP28. This year’s conference has also been earmarked as a “global stocktake” year, where countries will assess how they’ve performed in meeting the goals they set themselves in the Paris Agreement in 2015. Countries are expected to discuss the “loss and damage” fund agreed upon last year—a pot of money to help poorer countries deal with climatic disasters caused mostly by the historic emissions of wealthier countries.

COP, or the Conference of the Parties, lasts two weeks and has some 70,000 delegates in attendance. How do we know what news to follow from Dubai? I spoke with Vijay Vaitheeswaran, a longtime COP attendee and the Economist’s global energy and climate innovation editor, on FP Live. Subscribers can watch the full discussion in the video box atop this page. What follows is a lightly edited and condensed transcript.

Ravi Agrawal: So, this year’s COP agenda includes a “global stocktake.” Vijay, your piece in the Economist already took a stab at that. What progress has the world made?

Vijay Vaitheeswaran: Since the Paris Accords, renewables have taken off in quite a dramatic fashion. It is the cheapest way to produce power almost everywhere in the world—even cheaper than coal.

We are seeing much greater focus on energy efficiency—something that’s going to be on the table at this COP. We’ve seen improvements in a number of areas, such as energy access. We’ve also seen energy innovations on the decarbonization side as well—not just on the green energy side, but what’s called the brown-to-green side. That is transitioning the existing asset base, which is in the trillions upon trillions of dollars in the energy sector, to reduce carbon intensity of production, ultimately getting to zero carbon or net-zero carbon. But a move toward a brown-to-green approach is another amount of progress. We’re redirecting more capital.

But we’re still faced with some tremendous challenges: the scale of investment and some of the difficulties with the interest rate and inflation environment as well as political will. While there is progress, warming continues. We are not headed toward a 1.5-degree Celsius world—we’re blowing past that, to be honest, even though officially at the COP meeting you’re not allowed to say that. But in fact, we’re in a world of overshoot. So the real questions are, how do we do the best we can with the cards we have been dealt at the moment?

RA: Given what you say, what are the big issues on the table in Dubai?

VV: There are numerous and quite technical points that will be discussed by the negotiators. If you were an alien arriving from Mars, looking at this strange gathering that’s happening once a year with up to 70,000 people gathering in a hot, dusty, oil-rich country that is at great risk of climate change—what a strange gathering this might look like!

RA: And COPs are like giant trade shows, right?

VV: It’s even more bizarre. At least in a trade show you know what you’re buying. This is a marketplace of ideas—some good ideas, some very bad ideas. Lobbyists, influence peddlers, people who want to shade your opinion on the role of hydrogen. This is a massive show of activism for all flavor of green: from light green, willing to work with industry, to those on the other side that are very skeptical and think it’s odious that an oil republic is hosting a climate summit. So you’re going to see all forms of advocacy on display.

RA: Coming back to the broader goals this year, what are the main items that will be up for discussion?

VV: One of the important themes that will be discussed is the future of fossil fuels. A couple of years ago, at COP26, which was held in Glasgow, Scotland, there was a major effort to agree to phase out coal. Coal is by far the most greenhouse gas-intensive form of energy that we use. It’s also a pollutant in a lot of other nasty ways. It contributes to multiple millions of deaths per annum in local pollution, but it is relied upon by China, by India, by Indonesia, by South Africa, and a number of developing countries. It’s quite difficult and pernicious to get rid of.

There was almost a deal to phase it out, but at the last minute the Indian minister objected. Unanimous consent from all parties is required, and so that was not agreed. The host of the U.K. summit broke into tears in describing the failure of the summit to agree to a phase-out on coal. This time, the ambition is even greater. People want to agree to phase out fossil fuels completely. If not that, then at least a phase-down of fossil fuels.

There’s another camp that says they’ll agree to some of that, but you need to agree to “unabated fossil fuels.” That means you’re not allowed to burn fuels in which the emissions produced are not somehow managed.

This very technical debate is one of the elephants in the room. It threatens to poison the air for all other more productive conversations because where you fall on the spectrum will let you either participate or not participate in more productive conversations about funding for adaptation or a lot of other important issues that are on the table. But this fossil fuel debate has come to the top level of ideology because an OPEC country and one of the world’s biggest oil producers is hosting this climate summit. As a result, anyone who has a climate bent already has their back up thinking, the fix is in for Big Oil. This is a rigged game. There’s a non-zero chance that this will end up as one of the COP conferences that actually falls apart, as has happened previously in The Hague when the Kyoto treaty fell apart with the United States pulling out.

The level of distrust is quite high at this particular summit with the issue of the future of fossil fuels and how to word that language considered to be very important to many people attending.

RA: It looks like methane will also be an important issue in the next couple of weeks. This summit comes right after a somewhat successful meeting between U.S. President Joe Biden and Chinese President Xi Jinping in San Francisco earlier this month, where they agreed to start to curb methane emissions.

VV: It is impossible to have any kind of climate breakthrough if the two biggest emitters in the world, the United States and China, are not playing nice. Although the last couple of years have not been a good period for U.S.-China relations, we saw the breakthrough Xi and Biden had at the Sunnyvale gathering, at least in terms of setting aside direct hostilities toward more amicable language.

It was very interesting that on the eve of the APEC summit, the Chinese unveiled a new climate plan in which, for the first time ever, they said they’re going to include methane in their national climate plan. Methane happens to be a very important priority for the Biden administration. The U.S. Environmental Protection Agency is about to finalize tough new rules for emissions of methane from the oil and gas sector. They’ve made it a priority. They’ve been promoting efforts to help poorer countries deal with methane emissions. So they hit a sweet spot with China and they found an agreement on climate. And that’s a new area of optimism.

We also saw the European Union passed sweeping standards on methane, both for domestic energy as well as imported energy, which basically means liquefied natural gas will have to meet European standards for reduced methane emissions almost down to zero.

Methane is in some ways a neglected stepchild. It’s the second most important greenhouse gas after carbon dioxide but has not really had a lot of attention paid to it. It behaves differently—it’s much less long-lived in the atmosphere. Its life is closer to a decade, whereas CO2 stays in the air for hundreds of years. But its effects are much more powerful while it’s in the air. It has a much stronger warming effect. In fact, up to 45 percent of today’s warming can be explained by methane, and methane is the principal component of natural gas. A lot of it is released during the production of fossil fuels. It’s a very powerful greenhouse gas in the short to medium term that is now getting attention and, I think, might actually see some action at this COP.

RA: The decision to establish a loss and damage fund last year was hailed by many people as a real step forward. The very fact that there was an acknowledgment by countries in the so-called global north to help poorer countries deal with the impacts of climate change was a shift in terms of rhetoric. I believe a draft framework was agreed upon last month. Can you tell us a bit about that and how you see this issue being advanced at this conference?

VV: It had always been demanded, and rightly so, by developing countries or those who are most vulnerable. We did see a breakthrough in the setting up of the fund at COP last year, but no money. This was in some ways an empty gesture, but perhaps a symbolic victory. The rich countries acknowledged that this was important and, ultimately, the idea is for it to be funded.

We might see an announcement during COP made with some fanfare, no doubt, but it will probably be a relatively small amount of money. Oftentimes, the countries most affected by climate change are the ones that have contributed the least to emissions. Africa as a whole contributed less than 5 percent to the stock of emissions but will almost certainly bear a much greater burden from future damages and losses. Here’s the problem: This mechanism will never have enough money to compensate for those losses and damages. It’s a symbol. The scale of investment that’s required to deal with climate change measures in the trillions. These are the totemic battles that suck the energy out of these climate meetings.

What we really need to do is think about how we unlock pools of capital, probably from the private sector. There’s not enough government aid that’s going to reach in the trillions per annum, or from the World Bank or other developing agencies, to be meaningful. But COP is probably not going to get to the bottom of that process. What we really need is a more productive conversation about getting trillions of dollars, much of it in the non-China part of the developing world.

RA: Totemic is a great word. We’re looking at less than 1 or 2 percent of the potential capital that is required to actually move the needle on any of this.

You raised the role of the private sector in boosting or leveraging finance in areas that don’t always move as quickly. There’s also the issue of interest rates, where developing countries find it much harder to get suitable deals. Do you see much movement on the issue of freeing up money?

VV: I see some dark clouds, but I also see something of a silver lining.

There’s no question that the current global environment is hostile for clean energy. The good news is that there’s been a pragmatic shift away from what had been called ESG investing toward what I would call brown-to-green investing that is supporting the transition of traditional industries from being heavily polluting to shifting to decarbonization technologies, to becoming less polluting, and ultimately to becoming greener industries. That is opposed by some environmentalists who say you shouldn’t go brown to green—you should shut down brown industries, i.e., steel plants or coal or other forms of technologies, and only give money to the green. But that’s a virtuous approach that is running into a wall at the moment. We need to be a little more pragmatic.

We need all the tools in the toolkit to fight this battle because we’re so far behind on the climate battle. We cannot afford to let the ideal be the enemy of the good.

RA: Speaking of being pragmatic, that brings me to the topic of the United Arab Emirates, the world’s fifth-biggest oil producer, in the news for hosting the year’s most important climate conference. How do you think that’s going to play out in the politics of this year’s summit?

VV: It has already had the effect of poisoning the debate. Seventy thousand-plus guests are expected. Among the official delegations, there are a number of countries from small island states, from the so-called high ambition states, which include some of the countries in Europe who are very suspicious about the fact that this is being held in a country that is a big oil and gas producer.

There is another possibility, in the way that only Nixon could go to China and forge the kind of deal that he did. We might be able to see this again. At the heart of the climate problem is the fossil fuel industry. Getting the oil industry on board is something that has never happened. No previous COP has been able to do it. Perhaps Sultan [Ahmed] al-Jaber—the COP28 president who also runs ADNOC, a state-run oil company—can get the leaders of the Exxons and Chevrons and Shells, and also the national oil companies, to get on board.

Almost certainly, you’re going to see the United Arab Emirates, Kuwait, and Saudi Arabia be the last man standing in the world of oil, whenever that might be—tomorrow or 50 years from now. How do you get them to control their methane emissions and invest in decarbonization? There is a theory that only a muscular oil man can get these guys in a room with banks and get a deal. It’s a question of political will. If he can get that done, then I think history will remember that this was actually a successful COP. But if even that falls apart, then the critics will have been right to be cynical about an oil company being in charge.